TIDMKINO

RNS Number : 7493U

Kinovo PLC

07 December 2021

7 December 2021

Kinovo Plc

("Kinovo" or the "Group")

Half year results for the six months ended 30 September 2021

Kinovo Plc (AIM:KINO), the specialist property services Group that delivers compliance and sustainability solutions, announces its unaudited half year results for the six months ended 30 September 2021 (the "Period").

 
                                              Unaudited       Unaudited      Audited 
                                               6 months        6 months    12 months 
                                                     to              to           to 
                                           30 September    30 September     31 March 
                                                   2021            2020         2021 
                                                GBP 000         GBP 000      GBP 000 
---------------------------------------  --------------  --------------  ----------- 
 Continuing operations 
 
 Income statement 
 Revenue                                         23,760          14,478       39,369 
 Gross profit                                     5,861           4,321        9,291 
 EBITDA(1) (excluding effect of lease 
  payments)                                       2,116           1,439        2,777 
 Adjusted EBITDA(2) (including effect 
  of lease payments)                              1,831           1,038        2,096 
 Underlying operating profit(3)                   1,758             975        2,010 
 Underlying profit before taxation(4)             1,606             739        1,572 
 Profit/(loss) after taxation                       834           (361)        (252) 
 Basic earnings/(loss) per share(5)                1.36          (0.61)       (0.43) 
 Adjusted earnings per share(6)                    2.27            1.30         2.76 
 Cash flow 
 Net cash generated from operating 
  activities                                      2,540           2,544        5,542 
 Adjusted net cash generated from 
  operating activities(8)                         2,826           1,439        4,360 
 Adjusted operating cash conversion(9) 
  (%)                                              154%            139%         208% 
 
 Financial position and net assets 
 Net (cash)/overdraft(10)                       (2,237)         (2,465)      (1,293) 
 Term and other loans                             3,905           7,325        3,966 
 Net debt(7)                                      1,668           4,860        2,673 
 Net assets                                      11,250          10,487       10,862 
 
 Discontinued operations - business 
  held for sale (see note 11) 
 (Loss)/profit after taxation                     (279)             206          409 
 Basic (loss)/earnings per share                 (0.45)            0.35         0.69 
---------------------------------------  --------------  --------------  ----------- 
 

1. Earnings before interest, taxation, depreciation and amortisation ("EBITDA") and excluding non-underlying items, as set out in the financial review.

2. To align with internal and bank covenant reporting, Adjusted EBITDA is stated after a charge for lease payments, as set out in the financial review.

3. Underlying operating profit is stated before charging non-underlying items as set out in note 4.

4. Underlying profit before taxation is stated after finance costs and before charging non-underlying items as set out in the financial review.

5. Basic (loss)/earnings per share is the (loss)/profit after tax divided by the weighted average number of ordinary shares.

6. Adjusted earnings per share is the profit before deducting non-underlying items after tax divided by the weighted average number of ordinary shares.

7. Net debt comprises term loans and other loans, and cash net of overdraft, and excludes lease obligations.

8. Net cash generated from operating activities before tax and after lease payments and adding back GBPnil (2020: GBP0.33m) exceptional items in the period ended 30 September 2021. It is also adjusted to reflect the payment of deferred HMRC payments to normal terms. Further analysis is set out in the financial review.

9. Adjusted net cash generated from operating activities divided by Adjusted EBITDA, as set out in the financial review.

10. Including cash classified as held for sale.

Financial Highlights

   --      Continuing operations 

o Revenues increased 64% to GBP23.76 million (H1 2020: GBP14.48 million)

o Regulation services delivers 60% (GBP14.15 million) of total revenues

o Adjusted EBITDA increased 76% of GBP1.83 million (H1 2020: GBP1.04 million)

o Operating profit GBP1.20 million (H1 2020: loss of GBP0.21 million)

o Basic earnings per share of 1.36 pence (H1 2020: loss of 0.61 pence)

   --      Cash flow and net debt 

o Strong Adjusted cash generation of GBP2.83 million from continuing operations

o Adjusted operating cash conversion of 154%

o Total net debt reduced further to GBP1.67 million (H1 2020: GBP4.86 million)

o Resumption of full year final dividend

o Covid-19 related deferred VAT liability reduced to GBP0.41 million and will be fully repaid in January 2022.

Operational Highlights

-- Discontinued operations - advanced discussions to sell non-core construction business, DCB (Kent) Ltd

-- Secured new contracts with total multi-year potential value of GBP43.72 million, driven by investment in business development team

-- Three-year visible revenues* for continuing operations have increased by 37% from year end to GBP144 million

-- Over 90% of continuing operations revenues are recurring, underpinning the value of long-term contracts

-- Diversified revenues across Mechanical, Electrical and Building Services divisions; 30%, 36% and 34% respectively

   --      Installation of ground source heat pump, photovoltaic panels and EV chargers at Head Office 
   --      IT infrastructure project completed and generating efficient returns 

-- Number of apprentices account for 10% of the total workforce in our continuing operations, enhancing our commitment to social value

* Three-year visible revenues represent the minimum identifiable revenues from the 1 April 2021 on a like for like basis excluding DCB; being contracted or anticipated spend, as well as historical run rates.

Post-period end

-- A further GBP0.5 million of our term loan paid down at the end of November with outstanding balance on the HSBC term now GBP3.03 million

-- An additional GBP0.21 million of our deferred VAT paid down at the end of November 2021 with the remaining GBP0.20 million to be paid by January 2022

Commenting on the results and prospects, David Bullen, Chief Executive Officer, said:

"This has been the first six-month period since we rebranded and repositioned the Group. We are in an excellent position to better meet the needs of our customers, we are embracing our ESG responsibilities and continue to focus on our three strategic pillars of Regulation, Regeneration and Renewables. Revenues have increased 64% year on year and are well diversified across our strategic pillars and service divisions. In addition, we have continued to reduce our net debt and we have reinstated our final dividend payment.

The commitment and dedication of my colleagues as usual deserve recognition, consistently delivering the high expectations of our clients in difficult circumstances. On behalf of the Board, I thank them for their sterling efforts.

With the expected disposal of DCB (Kent), we strengthen our core strategic pillars, enabling the Group to focus our investment for future growth.

We have continued to see challenges presented by the external market relating to supply chain issues and the ongoing Covid-19 pandemic but remain committed to mitigate these risks as much as possible by planning ahead. Notwithstanding these headwinds, we remain confident in our outlook for the full year. The Directors expect the second half of the financial year to be stronger than the first half, in line with historical reporting periods pre-Covid-19."

This announcement contains information which, prior to its disclosure by this announcement, was inside information for the purposes of the Market Abuse Regulation

 
  For further information please 
   contact: 
 
   Kinovo Plc 
 Sangita Shah, Chair                  +44 (0)20 7796 4133 
  David Bullen, Chief Executive      (via Hudson Sandler) 
   Officer 
 
 
   Canaccord Genuity Limited 
   (Nominated Adviser and Sole 
   Broker)                            +44 (0)20 7523 8000 
 Corporate Broking: 
  Andrew Potts 
  Georgina McCooke 
 
  Sales: 
  Jonathan Barr 
 
 Hudson Sandler (Financial 
  PR)                                 +44 (0)20 7796 4133 
 Daniel de Belder 
  Bertie Berger 
 
 

Notes to Editors:

Kinovo plc ("Kinovo" or "the Group") is a leading UK provider of specialist property services centred on safety and regulatory compliance, home and community regeneration and sustainable living through the installation of efficient and greener energy alternatives.

Its focus on Regulation, Regeneration and Renewables ensures it is well placed to capitalise on both the current and future macro-economic drivers that are underpinned by Government legislation and policy.

There are four subsidiaries within the Kinovo Group:

   --      Purdy, an award-winning contractor in electrical, mechanical and property services; 
   --      Spokemead, a specialist in electrical installation, repairs and maintenance services; 
   --      R. Dunham, a provider of electrical installation and maintenance services; and 

-- DCB (Kent), a high-quality building, refurbishment and maintenance services provider (non-core discontinued operations classified as held for sale as at 30 September 2021).

Through their collaboration and shared central functions, the Group offers a range of end-to-end specialist services to customers, working in partnership with them to meet their own compliance and sustainability goals.

Kinovo Plc is listed on the AIM market of the London Stock Exchange.

Chair's statement

Kinovo's half year results have been extremely positive, reflecting the solid progress made in the implementation of the strategic plan relating to the pillars of Regulation, Regeneration and Renewables. The performance was delivered despite ongoing labour and supply chain challenges. We continue to win new contracts and deliver high expectations for our customers.

The results, together with the reintroduction of the dividend, clearly underline the successful turnaround of the business executed under the new executive and management team. Under David Bullen's leadership, the management team has collectively instilled a unified purpose and ensured the successful communication of the strategy to all staff.

In line with our strategy around the three strategic pillars of Regulation, Regeneration and Renewables, we are in advanced discussion on the disposal of DCB Kent Limited, the Group's construction arm, which we have deemed to be non-core. The disposal will allow Kinovo to focus on our key strengths: compliance and regulatory work under long-term contracts.

Whilst further market uncertainty remains in light of Covid-19, the Group has already taken measures to ensure that robust progress continues and where possible, built-in resilience to anticipate these potential issues.

The Group is enormously indebted to its people who continue to show an unstinting dedication and commitment. To each of them, I extend my profound gratitude on behalf of the Board. With their considerable effort, the business is now in a strong operational position and solid financial footing for a future that shows promise and continued growth.

Chief Executive Officer's review

Overview

Kinovo has delivered a robust and resilient performance during the first half of the year. We have rebranded and repositioned the Group, significantly increased our revenues and earnings, reinstated our final dividend payment, whilst continuing to reduce our net debt.

We are pleased with the progress made during the period as operations return to some semblance of normality as the challenges of Covid-19 have eased. However, we remain cautious of any new strains of the virus. Revenue during the six-month period increased by 64% year-on-year to GBP23.76 million, excluding our construction division, DCB (Kent) Limited, as we are currently in advanced discussions regarding its sale.

Adjusted EBITDA grew 76% from GBP1.04 million at the end of September 2020 to GBP1.83 million at the end of September 2021, while operating profit increased to GBP1.20 million compared with a loss of GBP0.21 million last year. Since September 2020, net debt has fallen by 66% from GBP4.89 million to GBP1.67 million, reiterating the cash-generative qualities of our underlying business. The Directors are committed to moving the Group into a net cash position.

The investment made to strengthen our business development team and drive organic growth is already demonstrating its value. During the first half of the year, several new contracts were secured with a total multi-year potential value of GBP43.6 million, most of which will commence in the second half of the current financial year.

These wins have increased the three-year visible revenues for our continuing operations since the year-end substantially by 37% to GBP144 million and include significant contracts with Sanctuary Housing, the London Boroughs of Waltham Forest and Wandsworth, ranging across our core services from electrical installation and fixed appliance testing, commercial boiler rooms, kitchens and bathroom replacements through to installing air source heat pumps and photovoltaic units.

Repositioning

Following the Group's change of name to Kinovo earlier this year, we re-defined our business model and investment case to concentrate on three strategic pillars as our key areas for the business moving forward: Regulation, Regeneration and Renewables. These pillars are centred on compliance-driven, regulatory-led specialist services that offer long-term contracts, recurring revenue streams and strong cash generation. Regulation is the foundation of our business and has been demonstrated by delivering 60% of our total revenues in the period.

Kinovo has concluded that its construction division, DCB (Kent) Limited, is non-core to our proposition. This is aligned to the Group's clearer focus and strategic pillars. During the period, DCB's revenue delivered GBP11.42 million with a loss before tax of GBP0.28 million. The Group is in advanced discussions with various parties for the disposal of DCB and an update will be made when appropriate.

The disposal will allow Kinovo to prioritise our core business, broadening and deepening our expertise in these areas through organic growth and strategic acquisitions, as and when a suitable fit arises.

Over the period, we have seen increases in the amount of work in our continuing operations under each of the three strategic pillars, with Regulation revenues rising by 55%, Regeneration revenues by 64% and Renewables revenues by 94%, reiterating the strength of our strategy.

People and Culture

We have built up our Human Resources department further in order to prioritise recruitment and training, aligned to our commitment to attract and retain talent as an employer of choice. To support a consistent and cohesive culture that embeds our purpose and values, we have rolled out a leadership and management training programme across the Group's management, which has been very well received by the participants. We intend to broaden this further across the employee base.

The Group has also been scaling up our apprenticeship scheme to secure a pipeline of capable and skilled employees for the future and now account for 10% of the total workforce in our continuing operations, enhancing our social value commitment. In addition, our drive to facilitate personal and professional development within the Group has seen several opportunities for internal promotion fulfilled, demonstrating the benefits our growth potential brings to our people.

Following our first employee engagement survey, we have listened, acted and made great strides addressing areas for improvement as a Group. We intend to initiate another survey over the coming months to gain feedback on our progress to date and identify additional areas on which to focus moving forward.

External factors

Our positive results for the first half of the year belie the headwinds of the significant market challenges that we have faced, notably supply chain cost inflation, labour and material availability.

These challenges persist post-period end, but we have continued to mitigate these risks as much as possible by broadening our procurement process, increasing our stockholding where feasible, and further diversifying our sub-contractor base.

Covid-19 has also continued to affect the business, albeit less so than last year. Whilst the UK was not in lockdown, as a people facing business, we have nevertheless experienced disruption to staffing during the period. We remain vigilant of the implications of potential surges, particularly as we move into the busiest period of the year. However, as we have previously demonstrated, the non-discretionary nature of most of our work positions us well, giving us a strong degree of comfort regarding our outlook.

Outlook

Our strategy and repositioning of the business is already proving itself. Our commitment to ESG being at the heart of everything we do is increasingly evident, and we are continuing to see positive momentum across all areas of the Group.

While the Board remains very mindful of the continuing challenges in the external environment, the strength and resilience of our first half performance means we are confident in our outlook for the full year and with our new contract wins, we expect a return to our historical heavier weighting in our second half performance.

Financial review

Trading review

In the six-month period to 30 September 2021, Kinovo has continued to demonstrate resilient progress, delivering strong growth in revenues, earnings and cash generation from its continuing operations, as Covid-19 restrictions eased, despite the market challenges of supply chain inflation and material and labour availability.

Comparative revenues for continuing operations during the period grew 64% to GBP23.76 million (2020: GBP14.48 million), Adjusted EBITDA (after the effect of a charge for lease payments) increased by 76% to GBP1.83 million (2020: GBP1.04 million) with operating profit from continuing operations delivering GBP1.20 million (2020: loss GBP0.21 million).

Profit before taxation for continuing operations was GBP1.05 million (2020: loss GBP0.45 million). Total profit for the period was GBP0.56 million (2020: loss GBP0.16 million).

The Adjusted EBITDA on continuing operations of GBP1.83 million in the Period is considered by the Board to be a key Alternative Performance Measure ("APM") as it is the basis upon which the underlying management information is prepared and the performance of the business assessed by the Board. It is also the measure for the covenants under our banking arrangements.

Adjusted EBITDA is calculated as earnings before interest, taxation, depreciation and amortisation, excluding non-underlying items and is stated after the effect of a charge for lease payments.

A reconciliation of EBITDA (excluding lease payments) and Adjusted EBITDA (including a charge for lease payments) for continuing operations is set out below. Comparative figures have been represented to split out the results relating to operations that have now been discontinued:

 
                                            Unaudited      Unaudited      Audited 
                                             6 months       6 months         year 
                                                ended          ended        ended 
                                         30 September   30 September     31 March 
                                                 2021           2020         2021 
Continuing operations                        GBP'000        GBP'000    GBP'000 
 
Profit/(loss) before tax                       1,046          (449)      (371) 
Add back: non-underlying items                   560          1,188      1,943 
Underlying profit before tax                   1,606            739      1,572 
Adjustments for items not included 
 in EBITDA: 
Finance costs                                    152            236        438 
Depreciation of property, plant and 
 equipment                                        65             45         82 
Depreciation of right-of-use assets              280            411        668 
Amortisation of software costs                    13              8         17 
EBITDA (excluding a charge for lease 
 payments)                                     2,116          1,439      2,777 
Adjustment for lease payments                  (285)          (401)      (681) 
                                        ------------  -------------  --------- 
Adjusted EBITDA                                1,831          1,038      2,096 
                                        ------------  -------------  --------- 
 
 

Non-underlying items

Non-underlying items are considered by the Board to be either exceptional in size, one-off in nature or non-trading related items and are represented by the following, and as set out in note 3.

 
                                             Unaudited      Unaudited    Audited 
                                              6 months       6 months       year 
                                                 ended          ended      ended 
                                          30 September   30 September   31 March 
                                                  2021           2020       2021 
                                               GBP'000        GBP'000    GBP'000 
Continuing activities 
Amortisation of customer relationships             517            847      1,582 
Share based payment charge                          43             15         27 
Restructuring costs                                  -            326        334 
Total                                              560          1,188      1,943 
                                         -------------  -------------  --------- 
 

Cash flow performance

Adjusted net cash generated from continuing operating activities in the Period was GBP2.82 million (2020: GBP1.44 million) delivering an Adjusted operating cash conversion of 154% (2020: 139%).

Adjusted operating cash conversion is calculated as cash generated from continuing operations (after lease payments) of GBP2.26 million (2020: GBP2.16 million), after adding back exceptional cash payments of GBPnil (2020: GBP0.33 million) and adjusted for the effects of deferred HMRC repayments of GBP0.57 million (2020: net deferred GBP1.04 million), in the Period; divided by Adjusted EBITDA of GBP1.83 million (2020: GBP1.44 million), as set out below;

 
Continuing operations                              Unaudited      Unaudited      Audited 
                                                    6 months       6 months         year 
                                                       ended          ended        ended 
                                                30 September   30 September     31 March 
                                                        2021           2020         2021 
                                                    GBP'000         GBP'000    GBP'000 
Net cash generated from operating activities 
 per condensed consolidated statement of 
 cash flows                                           1,926           3,004      5,814 
Adjustment for cash absorbed/(generated) 
 from discontinued operations                           614           (460)      (272) 
                                               ------------  --------------  --------- 
Net cash generated from continuing operating 
 activities                                           2,540           2,544      5,542 
Less lease payments                                   (284)           (389)      (667) 
Less corporation tax received                             -               -      (163) 
                                                      2,256           2,155      4,712 
Add back exceptional payments                             -             326        334 
Adjustment for deferred HMRC payments                   570         (1,042)      (686) 
                                               ------------  --------------  --------- 
Adjusted net cash generated from continuing 
 operating activities                                 2,826           1,439      4,360 
                                               ------------  --------------  --------- 
Adjusted EBITDA (as above)                            1,831           1,038      2,096 
                                               ------------  --------------  --------- 
Adjusted operating cash conversion                     154%            139%       208% 
                                               ------------  --------------  --------- 
 
 

Total HMRC VAT liabilities of GBP1.02 million were deferred at 31 March 2021 and during the Period GBP0.61 million was repaid in line with HMRC guidance. The remaining deferred VAT will be fully repaid by end January 2022.

Discontinued operations

Following its rebranding and strategic review, Kinovo determined that DCB Kent Limited (DCB), the Company's construction business was non-core and initiated a process to dispose of the business. See note 11 for additional details.

The activities of DCB have been presented as discontinued operations in the 6-month period ended 30 September 2021 and the comparatives of the Condensed Consolidated Statement of Comprehensive Income have been represented for the 6-month period ended 30 September 2020 and the year ended 31 March 2021.

Loss after tax for the discontinued activities for the 6-month period ended 30 September 2021 was GBP0.28 million (2020: profit GBP0.21 million).

The disposal of DCB will allow the Company to harmonise its operations and increase the focus on its three strategic workflow pillars; Regulation, Regeneration and Renewables. These pillars are centred on compliance driven, regulatory led specialist services that offer long-term contracts, recurring revenue streams and strong cash generation.

Net debt

There has been a continuing priority on cash management and reduction in net debt. In the six-month period to 30 September 2021, net debt reduced by GBP1.00 million (37%) to GBP1.67 million compared to net debt of GBP2.67 million at 31 March 2021 including cash balances that rose from GBP1.29 million at 31 March 2021 to GBP2.24 million at 30 September 2021.

Net debt has reduced GBP3.19 million (66%) from GBP4.86 million at 30 September 2020 to GBP1.67 million at 30 September 2021.

During the six-month period, the Company reinstated its final dividend (0.50 pence per ordinary share) and paid GBP0.29 million.

In addition, deferred VAT totalling GBP0.61 million was paid, strengthening the Company's financial position further following the effects of the pandemic. Outstanding deferred VAT was GBP0.41 million at 30 September 2021 and will be fully repaid by January 2022.

Set out below is an analysis of net debt:

 
                                         Unaudited   Unaudited  Audited 
                                   at 30 September       at 30    at 31 
                                              2021   September    March 
                                                          2020     2021 
                                           GBP'000     GBP'000  GBP'000 
 
Net (cash)/overdraft (including 
 cash held for sale)                       (2,237)     (2,465)  (1,293) 
HSBC term loan                               3,533       6,833    3,533 
HSBC Mortgage                                  224         285      257 
Other term loan                                148         207      176 
                                  ----------------  ----------  ------- 
Net debt                                     1,668       4,860    2,673 
                                  ----------------  ----------  ------- 
 
 

On 22 May 2020 the Group secured the restructuring of GBP9.83 million debt facilities with HSBC UK Bank plc. The Group's previous debt facility was in the form of a GBP3.33 million term loan and a GBP6.50 million overdraft facility. This debt facility has been restructured to represent a GBP7.33 million term loan facility and a GBP2.50 million overdraft facility.

The Group drew down fully on this increased additional term loan facility to increase cash balances by GBP4.0 million. The term loan expires in September 2022 and there are GBP0.5 million quarterly repayments which started in August 2020.

The first covenant test for the Group was achieved, being a minimum EBITDA of GBP1.1 million for the year ended 31 March 2021.

On 26 March 2021 the Group agreed amendments to the facility agreement to enable accelerated repayment of the term loan, amended covenant measures and changes to the basis of interest calculation effective from 1 October 2021, in advance of the LIBOR transition deadline.

On 31 March 2021, the Group repaid an additional amount of GBP2.3 million of the HSBC term loan, of which GBP1.0 million relates to advance payment of the first two quarterly repayments for the year ending 31 March 2022.

As term loan repayments were accelerated, it was agreed with HSBC there is no requirement to measure covenants for the first half of the year ending 31 March 2022.

The covenants for the quarter to 31 December 2021 and beyond will be tested quarterly and they are:

   (i)            achievement of minimum levels of Adjusted EBITDA; 
   (ii)           debt service cover; and 
   (iii)          interest cover. 

Dividends

A final dividend for the year ended 31 March 2021 of 0.5 pence per ordinary share and totalling GBP0.29 million (2020: GBPnil) was paid in the Period. No interim dividend is currently recommended for the year ending 31 March 2022 as the Group continues to prioritise the reduction of net debt.

 
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
For the six month period ended 30 September 2021 
                                                Unaudited      Unaudited        Audited 
                                                 6 months       6 months     Year ended 
                                                       to             to       31 March 
                                             30 September   30 September           2021 
                                                     2021           2020 
                                                  GBP'000        GBP'000        GBP'000 
Continuing operations 
Revenue                                            23,760         14,478         39,369 
Cost of sales                                    (17,899)       (10,157)       (30,078) 
Gross Profit                                        5,861          4,321          9,291 
Underlying administrative expenses                (4,103)        (3,346)        (7,281) 
                                            -------------  -------------  ------------- 
Operating profit before non-underlying 
 items                                              1,758            975          2,010 
Non-underlying administrative expenses 
Amortisation of customer relationships              (517)          (847)        (1,582) 
Share based payment charge                           (43)           (15)           (27) 
Restructuring costs                                     -          (326)          (334) 
Total non-underlying administrative 
 expenses (note 4)                                  (560)        (1,188)        (1,943) 
Operating profit                                    1,198          (213)             67 
Finance costs                                       (152)          (236)          (438) 
Profit/(loss) before taxation                       1,046          (449)          (371) 
Income tax expense (note 10)                        (212)             88            119 
                                            -------------  -------------  ------------- 
Total profit/(loss) from continuing 
 operations for the period                            834          (361)          (252) 
 
Discontinued operations 
(Loss)/profit for the period (note 
 11)                                                (279)            206            409 
Total comprehensive income/(loss) 
 for the period attributable to the 
 equity holders of the parent company                 555          (155)            157 
                                            =============  =============  ============= 
 
Earnings/(loss) per share from continuing 
 operations (note 6) 
Basic (pence)                                        1.36         (0.61)         (0.43) 
Diluted (pence)                                      1.30         (0.61)         (0.43) 
Earnings/(loss) per share (note 6) 
Basic (pence)                                        0.90         (0.26)           0.27 
Diluted (pence)                                      0.87         (0.26)           0.27 
 
 

There are no items of other comprehensive income for the period.

 
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
At 30 September 2021 
                                              Unaudited      Unaudited      Audited 
                                           30 September   30 September     31 March 
                                                   2021           2020         2021 
                                                GBP'000        GBP'000      GBP'000 
Assets 
Non-current assets 
Intangible fixed assets                           5,212          8,984        8,209 
Property plant and equipment                      1,005          1,326        1,307 
Right-of-use-assets                               1,420          1,684        1,688 
                                          -------------  -------------  ----------- 
Total non-current assets                          7,637         11,994       11,204 
                                          -------------  -------------  ----------- 
 
Current assets 
Inventories                                       2,547          4,386        2,467 
Trade and other receivables                      11,775         15,481       16,726 
Cash and cash equivalents                         2,031          2,465        1,293 
                                          -------------  -------------  ----------- 
Total current assets                             16,353         22,332       20,486 
                                          -------------  -------------  ----------- 
 
Assets classified as held for sale 
 (note 11)                                        9,920              -            - 
 
Total assets                                     33,910         34,326       31,690 
                                          =============  =============  =========== 
 
Issued share capital and reserves 
Share capital (note 8)                            6,214          5,872        6,121 
Own shares                                        (850)              -        (850) 
Share premium                                     9,244          8,609        9,210 
Share based payment reserve                          30            630           30 
Merger reserve                                    (248)          (248)        (248) 
Retained earnings                               (3,140)        (4,376)      (3,401) 
Total equity attributable to the equity 
 of the group                                    11,250         10,487       10,862 
                                          -------------  -------------  ----------- 
 
Non-current liabilities 
Borrowings (note 7)                               1,781          5,206        2,842 
Lease liabilities                                   995          1,133        1,183 
Deferred tax liabilities                            753            759          699 
                                                  3,529          7,098        4,724 
                                          -------------  -------------  ----------- 
 
Current liabilities 
Overdraft (note 7)                                    -              -            - 
Borrowings (note 7)                               2,125          2,119        1,124 
Lease liabilities                                   440            610          552 
Current income tax liabilities                       29              -            - 
Trade and other payables                         10,259         14,012       14,428 
                                                 12,853         16,741       16,104 
                                          -------------  -------------  ----------- 
 
Liabilities classified as held for 
 sale (note 11)                                   6,278              -            - 
 
Total equity and liabilities                     33,910         34,326       31,690 
                                          =============  =============  =========== 
 
 
 
 
 
 
  CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 
For the six month period ended 30 September 2021 
                                                  Unaudited      Unaudited        Audited 
                                                   6 months       6 months     Year ended 
                                                         to             to       31 March 
                                               30 September   30 September           2021 
                                                       2021           2020 
                                                    GBP'000        GBP'000        GBP'000 
 
Net cash generated from operating 
 activities (note 5)                                  1,926          3,004          5,814 
                                              -------------  -------------  ------------- 
 
Cash flow from investing activities 
Purchases of property, plant and equipment             (82)           (22)           (87) 
Purchase of intangible assets                         (117)           (13)          (115) 
Proceeds on disposal of property, 
 plant and equipment                                      -              2             20 
                                              -------------  -------------  ------------- 
Net cash used in investing activities                 (199)           (33)          (182) 
                                              -------------  -------------  ------------- 
 
Cash flow from financing activities 
Proceeds from borrowings                                  -          7,333          7,333 
Issue of new share capital (net of 
 share issue costs)                                       -              -            850 
Purchase of own shares for JSOP*                          -              -          (850) 
Repayment of borrowings                                (61)        (3,890)        (7,249) 
Interest paid                                         (158)          (248)          (461) 
Principal payments of leases                          (270)          (369)          (630) 
Dividends paid                                        (294)              -              - 
Net cash (used)/generated in financing 
 activities                                           (783)          2,826        (1,007) 
                                              -------------  -------------  ------------- 
 
Net increase in cash and cash equivalents               944          5,797          4,625 
 
Cash and cash equivalents at beginning 
 of period/year                                       1,293        (3,332)        (3,332) 
 
Cash and cash equivalents at end of 
 period/year                                          2,237          2,465          1,293 
                                              =============  =============  ============= 
 
The condensed consolidated statement 
 of cash flows includes all activities 
 of the Group. Cash flows from discontinued 
 operations are set out in note 11. 
 
 * Joint Share Ownership Plan. Full 
 details of the scheme is given in 
 the annual report. 
 
 
 
 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 For the six month period ended 30 September 2021 (unaudited) 
 
                                    Issued     Share  Own shares  Share based    Merger   Retained    Total 
                                     share   premium                  payment   reserve   earnings   equity 
                                   capital                            reserve 
                                   GBP'000   GBP'000     GBP'000      GBP'000   GBP'000    GBP'000  GBP'000 
 
Balance at 1 April 
 2021                                6,121     9,210       (850)           30     (248)    (3,401)   10,862 
Profit and total comprehensive 
 income for the period                   -         -           -            -         -        555      555 
Issue of share capital                  93        34           -         (46)         -          -       81 
Share-based payment 
 charge                                  -         -           -           46         -          -       46 
Dividends paid                           -         -           -            -         -      (294)    (294) 
Balance at 30 September 
 2021                                6,214     9,244       (850)           30     (248)    (3,140)   11,250 
                                  ========  ========  ==========  ===========  ========  =========  ======= 
 
 For the six month period ended 30 September 2020 (unaudited) 
 
Balance at 1 April 
 2020                                5,872     8,609           -          612     (248)    (4,221)   10,624 
Loss and total comprehensive 
 income for the period                   -         -           -            -         -      (155)    (155) 
Share-based payment 
 charge                                  -         -           -           18         -          -       18 
Balance at 30 September 
 2020                                5,872     8,609           -          630     (248)    (4,376)   10,487 
 
 For the year ended 31 March 2021 
 
Balance at 1 April 
 2020                                5,872     8,609           -          612     (248)    (4,221)   10,624 
Profit and total comprehensive 
 income for the period                   -         -           -            -         -        157      157 
Issue of share capital                 249       601       (850)            -         -          -        - 
Share-based payment 
 charge                                  -         -           -           30         -          -       30 
Deferred tax on share 
 option                                                                                         51       51 
Transfer to retained 
 earnings for share 
 options cancelled                       -         -           -        (612)         -        612        - 
Balance at 31 March 
 2021                                6,121     9,210       (850)           30     (248)    (3,401)   10,862 
                                  ========  ========  ==========  ===========  ========  =========  ======= 
 
 
 

NOTES TO THE INTERIM STATEMENT

   1.             Basis of preparation 

Kinovo Plc and its subsidiaries (together "the Group") operate in the gas heating, electrical and general building services industries. The Group is a public company operating on the AIM Market of the London Stock Exchange (AIM) and is incorporated and domiciled in England and Wales (registered number 09095860). The address of its registered office is 201 Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT.

These interim financial statements of the Group have been prepared on a going concern basis under the historical cost convention, and in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the United Kingdom, the International Financial Reporting Interpretations Committee ("IFRIC") interpretations issued by the International Accounting Standards Boards ("IASB") that are effective or issued and early adopted as at the time of preparing these financial statements and in accordance with the provisions of the Companies Act 2006. The Group has adopted all of the new and revised standards and interpretations issued by the IASB and the International Financial Reporting Interpretations Committee ("IFRIC") of the IASB, as they have been adopted by the United Kingdom, that are relevant to its operations and effective for accounting periods beginning on 1 April 2021.

The interim financial information does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements, being the statutory financial statements for Kinovo Plc as at 31 March 2021, which have been prepared in accordance with IFRS as adopted by the United Kingdom.

The interim financial information for the six months ended 30 September 2021 do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. The interim financial information has not been audited.

Significant accounting policies

The accounting policies adopted in the preparation of the interim financial information is consistent with those expected to be adopted in the preparation of the Group's annual financial statements for the year ending 31 March 2022.

Going concern

The Directors have prepared financial forecasts and cash flows looking beyond twelve months from the date of these consolidated financial statements. In developing these forecasts the Directors have made assumptions based upon their view of the current and future economic conditions that will prevail over the forecast period, together with the expected ongoing effect of Covid-19.

The businesses have delivered a robust and resilient performance in the last six months; profitability has increased significantly, new contract wins have been achieved and visible revenues increased. The Board also review the Group's sources of available funds and the level of headroom against its committed borrowing facilities and associated covenants. The Group reduced its net debt by GBP3.19 million in the last 12 months.

After taking into account the above factors and taking into account possible sensitivities in trading performance, the Board have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Board continues to adopt the going concern basis in the preparation of these financial statements.

Publication of non-statutory financial statements

The results for the six months ended 30 September 2021 and 30 September 2020 are unaudited and have not been reviewed by the auditor. Statutory accounts for the year ended 31 March 2021 were filed with the Registrar of Companies in September 2021.

The interim financial information has been prepared on the basis of the same accounting policies as published in the audited financial statements for the year ended 31 March 2021. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards and International Financial Reporting Interpretations Committee ("IFRIC") pronouncements as adopted by the United Kingdom. Comparative figures for the year ended 31 March 2021 have been extracted from the statutory financial statements for that period.

   2.             Corporate governance, principal risks and uncertainties 

The Corporate Governance Report included with our Annual Report and Financial Statements for 2021 detailed how we embrace governance. The Kinovo Board recognise the importance of sound corporate governance commensurate with the size and nature of the Company and the interests of its shareholders.

The Quoted Companies Alliance has published a corporate governance code for small and mid-sized quoted companies, which includes a standard of minimum best practice for AIM companies, and recommendations for reporting corporate governance matters (the "QCA Code"). Kinovo has adopted the QCA Code.

The nature of the principal risks and uncertainties faced by the Group have not changed significantly from those set out within the Kinovo Plc annual report and accounts for the year ended 31 March 2021.

   3.             Segmental analysis 

The Board of Directors has determined an operating management structure aligned around the three core activities of the Group, being Gas maintenance, Building services and Electrical services. Operating profit before non-underlying items has been identified as the key performance measure. The following is an analysis of the performance by segment:

 
                                          Unaudited      Unaudited      Audited 
                                           6 months       6 months         year 
                                              ended          ended        ended 
                                       30 September   30 September     31 March 
                                               2021           2020         2021 
Continuing operations                      GBP'000        GBP'000    GBP'000 
 
Gas maintenance                              7,100          4,072     12,262 
Building services                            7,999          4,350     13,185 
Electrical services                          8,661          6,056     13,922 
Total revenue                               23,760         14,478     39,369 
                                      ------------  -------------  --------- 
 
 

Reconciliation of operating profit before non-underlying items to profit before taxation.

 
                                                  Unaudited      Unaudited      Audited 
                                                   6 months       6 months         year 
                                                      ended          ended        ended 
                                               30 September   30 September     31 March 
                                                       2021           2020         2021 
                                                   GBP'000        GBP'000    GBP'000 
Continuing operations 
Gas maintenance                                        884            646      1,406 
Building services                                      713            137        270 
Electrical services                                    793            704      1,723 
Unallocated central costs                            (632)          (512)    (1,389) 
Operating profit before non-underlying 
 items                                               1,758            975      2,010 
Amortisation of acquisition intangibles              (517)          (847)    (1,582) 
Share-based payment charge                            (43)           (15)       (27) 
Restructuring costs                                      -          (326)      (334) 
Operating profit                                     1,198          (213)         67 
Finance costs                                        (152)          (236)      (438) 
                                              ------------  -------------  --------- 
Profit before tax                                    1,046          (449)      (371) 
Income tax expense                                   (212)             88        119 
                                              ------------  -------------  --------- 
Total profit/(loss) for the period 
 from continuing operations                            834          (361)      (252) 
 
(Loss)/profit from discontinued operations           (279)            206        409 
 
Total comprehensive income/(loss) for 
 the period attributable to the equity 
 holders of the parent company                         555          (155)        157 
                                              ------------  -------------  --------- 
 
 

Only the Group Consolidated Statement of Comprehensive Income is regularly reviewed by the chief operating decision maker and consequently no segment assets or liabilities are disclosed under IFRS 8.

   4.             Non-underlying items 

Operating profit includes the following items which are considered by the Board to be exceptional in size, one off in nature or non-trading related.

 
                                          Note      Unaudited      Unaudited      Audited 
                                                     6 months       6 months   Year ended 
                                                           to             to     31 March 
                                                 30 September   30 September         2021 
                                                         2021           2020 
                                                      GBP'000        GBP'000      GBP'000 
Amortisation of customer relationships     (a)            517            847        1,582 
Share based payment charge                 (b)             43             15           27 
Restructuring costs                        (c)              -            326          334 
                                                -------------  -------------  ----------- 
                                                          560          1,188        1,943 
                                                -------------  -------------  ----------- 
 
 

All non-underlying items have been charged to other operating expenses.

   (a)   Amortisation of customer relationships 

Amortisation of acquisition intangibles was GBP0.52 million for the period (H1 2020: GBP0.85 million) and relates to amortisation of the customer relationships identified by the Directors on the acquisition of Purdy, Spokemead and R. Dunham. Amortisation relating to DCB is presented in discontinued operations as set out in note 11.

   (b)   Share based payment charge 

A number of share option schemes are in place and new options have been granted during the period relating to the Share Incentive Plan amounting to 582,494 (2020: None) Ordinary shares. The share based payment charge has been separately identified as it is a non-cash expense. The share based payment charge relating DCB is presented in discontinued operations as set out in note 11.

   (c)   Restructuring costs 

Comprise redundancy and associated costs and costs of the rationalisation of the property portfolio resulting from the restructure of the Group operations and were one off and non-recurring. There were GBPnil restructuring costs in the period to 30 September 2021 (2020: GBP0.33 million). Restructuring costs relating DCB are presented in discontinued operations as set out in note 11.

   5.             Cash flows from operating activities 
 
                                                Unaudited      Unaudited      Audited 
                                                 6 months       6 months   Year ended 
                                                       to             to     31 March 
                                             30 September   30 September         2021 
                                                     2021           2020 
                                                  GBP'000        GBP'000      GBP'000 
 
Profit/(loss) before income tax                       696          (192)          140 
Adjusted for: 
Finance costs                                         157            248          461 
Loss/(profit) on disposal of property, 
 plant and equipment                                    1            (2)          (2) 
Depreciation                                          384            505          847 
Amortisation of intangible assets                     652            976        1,843 
Share based payments                                   46             18           30 
Movement in receivables                           (1,640)          3,826        2,580 
Movement in payables                                1,969        (1,770)      (1,561) 
Movement in inventories                             (384)          (605)        1,313 
Tax reclaimed                                          45              -          163 
                                            -------------  -------------  ----------- 
Net cash from operating activities*                 1,926          3,004        5,814 
                                            -------------  -------------  ----------- 
 
  * Includes all activities of the Group. 
  Cash flows from discontinued operations 
  are set out in note 11 
 
 
   6.             Earnings/(loss) per share 

The calculation of basic earnings per share is based on the result attributable to shareholders divided by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is calculated under the same method adjusted for the weighted average share options outstanding during the period as well as ordinary shares in issue. For the year end 31 March 2021 none of the options were dilutive as the exercise price on the schemes were below the average share price for the year.

Basic earnings per share amounts are calculated by dividing net profit for the year or period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Basic and diluted earnings per share is calculated as follows:

 
                                              Unaudited      Unaudited      Audited 
                                               6 months       6 months   Year ended 
                                                     to             to     31 March 
                                           30 September   30 September         2021 
                                                   2021           2020 
                                                GBP'000        GBP'000      GBP'000 
 
Profit/(loss) used in calculating 
 basic and diluted earnings 
 per share 
Continuing operations                               834          (361)        (252) 
Discontinued activities                           (279)            206          409 
                                          -------------  -------------  ----------- 
Total operations                                    555          (155)          157 
                                          -------------  -------------  ----------- 
Weighted average number of shares 
 for the purpose of basic earnings 
 per share                                   61,376,111     58,721,845   58,956,248 
Weighted average number of shares 
 for the purpose of diluted earnings 
 per share                                   64,116,798     58,721,845   58,956,248 
 
Continuing operations 
Basic earnings/(loss) per share (pence)            1.36         (0.61)       (0.43) 
Diluted earnings/(loss) per share 
 (pence)                                           1.30         (0.61)       (0.43) 
 
Discontinued activities 
Basic (loss)/earnings per share (pence)          (0.45)           0.35         0.69 
Diluted (loss)/earnings per share 
 (pence)                                         (0.43)           0.35         0.69 
 
Total operations 
Basic earnings/(loss) per share (pence)            0.90         (0.26)         0.27 
Diluted earnings/(loss) per share 
 (pence)                                           0.87         (0.26)         0.27 
 
 

Adjusted earnings per share

Profit after tax is stated after deducting non-underlying items totalling GBP0.68 million (2020: GBP1.35 million). Non-underlying items are either exceptional in size, one off in nature or non-trading related. These are shown separately on the face of the Consolidated Statement of Comprehensive Income.

The calculation of adjusted basic and adjusted diluted earnings per share is based on the result attributable to shareholders, adjusted for non-underlying items, divided by the weighted average number of ordinary shares in issue during the year.

 
                                                 Unaudited           Unaudited                Audited 
                                                  6 months            6 months             Year ended 
                                                        to                  to               31 March 
                                              30 September        30 September                   2021 
                                                      2021                2020 
                                                   GBP'000             GBP'000                GBP'000 
Continuing activities 
Profit/(loss) after tax                                834               (361)                  (252) 
Add back: 
Amortisation of acquisition intangible 
 assets                                                517                 847                  1,582 
Share based payment charge                              43                  15                     27 
Restructuring costs                                      -                 326                    334 
Impact of above adjustments on corporation 
 tax                                                     -                (62)                   (63) 
                                             -------------  ------------------  --------------------- 
                                                     1,394                 765                  1,628 
                                             -------------  ------------------  --------------------- 
 
 
Discontinued operations 
(Loss)/profit after tax                              (279)                 206                    409 
Add back: 
Amortisation of acquisition intangible 
 assets                                                115                 116                    232 
Share based payment charge                               3                   3                      3 
Restructuring costs                                      -                  45                     45 
Impact of above adjustments on corporation 
 tax                                                     -                 (9)                    (9) 
                                             -------------  ------------------  --------------------- 
                                                     (161)                 361                    680 
                                             -------------  ------------------  --------------------- 
 
Total activities 
Profit/(loss) after tax                                555               (155)                    157 
Add back: 
Amortisation of acquisition intangible 
 assets                                                632                 963                  1,814 
Share based payment charge                              46                  18                     30 
Restructuring costs                                      -                 371                    379 
Impact of above adjustments on corporation 
 tax                                                     -                (70)                   (72) 
                                             -------------  ------------------  --------------------- 
                                                     1,233               1,127                  2,308 
                                             -------------  ------------------  --------------------- 
 
Weighted average number of shares 
 for the purpose of basic adjusted 
 earnings per share                             61,376,111          58,721,845       58,956,248 
Weighted average number of shares 
 for the purpose of diluted adjusted 
 earnings per share                             64,116,798          58,721,845       58,956,248 
 
Continuing operations 
Basic adjusted earnings per share 
 (pence)                                              2.27                1.30                   2.76 
Diluted adjusted earnings per share 
 (pence)                                              2.17                1.30                   2.76 
 
Discontinued activities 
Basic adjusted (loss)/earnings per 
 share (pence)                                      (0.26)                0.61                   1.15 
Diluted adjusted (loss)/earnings per 
 share (pence)                                      (0.25)                0.61                   1.15 
 
Total activities 
Basic adjusted earnings per share 
 (pence)                                              2.01                1.92                   3.91 
Diluted adjusted earnings per share 
 (pence)                                              1.92                1.92                   3.91 
 
 
   7.             Borrowings 
 
                                    Unaudited      Unaudited    Audited 
                                 30 September   30 September   31 March 
                                         2021           2020       2021 
                                      GBP'000        GBP'000    GBP'000 
Non-current borrowings 
Bank and other borrowings; 
Term loans                              1,534          4,833      2.533 
Mortgage loan                             167            228        200 
Other loans                                80            145        109 
                                -------------  -------------  --------- 
Total non-current borrowings            1,781          5,206      2,842 
                                -------------  -------------  --------- 
Current borrowings; 
Bank and other borrowings; 
Term loans                              2,000          2,000      1,000 
Mortgage loans                             57             57         57 
Other loans                                68             62         67 
Overdraft                                   -              -          - 
                                -------------  -------------  --------- 
Total current borrowings                2,125          2,119      1,124 
                                -------------  -------------  --------- 
Bank and other borrowings; 
Term loans                              3,533          6,833      3,533 
Mortgage loans                            224            285        257 
Other loans                               148            207        176 
Overdraft                                   -              -          - 
                                -------------  -------------  --------- 
Total borrowings                        3,905          7,325      3,966 
                                -------------  -------------  --------- 
 

The fair value of the borrowings outstanding as at 30 September 2021 is not materially different to its carrying value since interest rates applicable on the loans are close to market rates.

   8.             Share capital 
 
Ordinary shares of GBP0.10 each        Unaudited      Unaudited    Audited 
                                    30 September   30 September   31 March 
                                            2021           2020       2021 
                                         GBP'000        GBP'000    GBP'000 
At the beginning of the period             6,121          5,872      5,872 
Issued in the period                         93*              -        249 
At the end of the period                   6,214          5,872      6,121 
                                   -------------  -------------  --------- 
 

* Funds received into SIP trust in September 2021 and remitted to Company in October 2021.

 
Number of shares                      Unaudited      Unaudited     Audited 
                                   30 September   30 September    31 March 
                                           2021           2020        2021 
At the beginning of the period       61,214,703     58,721,845  58,721,845 
Issued in the period                    923,054              -   2,492,858 
At the end of the period             62,137,757     58,721,845  61,214,703 
                                  -------------  -------------  ---------- 
 
   9.             Dividends 

In the period, the Company paid a final dividend for the year ended 31 March 2021 of 0.50 pence per ordinary share totalling GBP0.29 million. The Board do not recommend an interim dividend for the year ending 31 March 2022.

   10.          Taxation 

The income tax charge for the six months ended 30 September 2021 is calculated based upon the effective tax rates expected to apply to the Group for the full year of 19% (2020: 19%). Differences between the estimated effective rate and the statutory rate of 19% are due to non-deductible expenses.

   11.          Discontinued operations 
   (a)   Description 

Following its rebranding and strategic review, Kinovo announced that DCB Kent Limited (DCB), the Company's construction business was non-core and held for sale. The proposed disposal of DCB will allow the Company to harmonise its operations and increase the focus on its three strategic workflow pillars; Regulation, Regeneration and Renewables. These pillars are centred on compliance driven, regulatory led specialist services that offer long-term contracts, recurring revenue streams and strong cash generation.

   (b)   Financial performance and cash flow information from discontinued operations 
 
                                                    Unaudited      Unaudited      Audited 
                                                     6 months       6 months   Year ended 
                                                           to             to     31 March 
                                                 30 September   30 September         2021 
                                                         2021           2020 
                                                      GBP'000        GBP'000      GBP'000 
Revenue                                                11,420          8,954       20,817 
Cost of sales                                        (10,011)        (7,281)     (17,210) 
Gross Profit                                            1,409          1,673        3,607 
Underlying administrative expenses                    (1,635)        (1,240)      (2,793) 
                                                -------------  -------------  ----------- 
Operating (loss)/profit before non-underlying 
 items                                                  (226)            433          814 
Non-underlying administrative expenses 
Amortisation of customer relationships                  (115)          (116)        (232) 
Share based payment charge                                (3)            (3)          (3) 
Restructuring costs                                         -           (45)         (45) 
Total non-underlying administrative 
 expenses                                               (118)          (164)        (280) 
Operating (loss)/profit                                 (344)            269          534 
Finance costs                                             (5)           (12)         (23) 
(Loss)/profit before taxation                           (349)            257          511 
Income tax credit/(expense)                                70           (51)        (102) 
                                                -------------  -------------  ----------- 
(Loss)/profit for the period                            (279)            206          409 
                                                -------------  -------------  ----------- 
Operating profit excludes allocation 
 of Corporate costs in accordance with 
 IFRS 5, which states that only costs 
 clearly identifiable as directly relating 
 to the discontinued operations can 
 be included. 
 
(Loss)/earnings per share from discontinued 
 operations 
Basic (pence)                                          (0.45)           0.35         0.69 
Diluted (pence)                                        (0.43)           0.35         0.69 
 
Cash flows from discontinued operations 
Net cash (outflow)/inflow from operating 
 activities                                             (614)            460          272 
Net cash outflow from investing activities               (10)           (26)         (40) 
Net cash outflow from financing activities               (18)           (25)         (44) 
                                                -------------  -------------  ----------- 
Net (reduction)/increase in cash generated 
 by the subsidiary                                      (642)            409          188 
                                                -------------  -------------  ----------- 
 
 
   (c)   Assets and liabilities of subsidiary classified as held for sale 
 
                                          Unaudited      Unaudited    Audited 
                                       30 September   30 September   31 March 
                                               2021           2020       2021 
                                            GBP'000        GBP'000    GBP'000 
Assets classified as held for 
 sale 
Intangible - Goodwill                         1,351              -          - 
Intangible - Customer relationship            1,048              -          - 
Intangible - Computer software                   73 
Property, plant and equipment                   268              -          - 
Inventory                                       303              -          - 
Trade and other receivables                   6,671              -          - 
Cash                                            206              -          - 
Total assets held for sale                    9,920              -          - 
                                      -------------  -------------  --------- 
 
Liabilities directly associated 
 with assets classified as held 
 for sale 
Trade and other payables                      6,105              -          - 
Finance leases                                   41              -          - 
Income tax liabilities                           44 
Deferred tax                                     88              -          - 
Total liabilities classified 
 as held for sale                             6,278              -          - 
                                      -------------  -------------  --------- 
 

The assets and liabilities of DCB (Kent) Limited have been included as held for sale at their carrying value, as the full assessment of the fair value has yet to be completed. A review of the effect of the planned disposal of DCB will be undertaken for the results for the year ending 31 March 2022.

   12.          Forward-Looking statements 

This report contains certain forward-looking statements with respect to the financial condition of Kinovo Plc. These statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There could be a number of factors which influence the actual results and developments. These could impact on the forward-looking statements included in this report.

   13.          Interim Report 

Copies of this Interim Report will be available to download from the investor relations section on the Group's website www.kinovoplc.com .

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